Background: There are many appealing reasons to support kinship foster care as an alternative to other types of out-of-home care. In South Korea, however, less is known about whether or not kinship foster care is beneficial for children's development, and nothing is known about how kinship foster care compares with other types of out-of-home care in terms of its associations with children's developmental outcomes. Objective: This study aimed to examine the associations between kinship foster care and children's school adjustment, which were separately compared with institutional and group home care. Methods: This study used data from a nationally representative sample of 414 children in out-of-home care in South Korea and employed propensity score weighting to address selection bias. Results: The main analyses revealed that the children in kinship foster care showed more bonding to school and less misbehavior at school than the children in institutional care. Children in grandparent foster care also showed more bonding to school than those in group home care. Interaction analyses suggested that the associations between specific types of kinship foster care and children's school adjustment varied by the child's gender and the presence of a biological father. Conclusions: Implications for research, policy, and practice to improve the healthy development of children in out-of-home care were discussed based upon the results.